Grain Market Update - Wheat (November 2013)

The following graph shows the movement in Chicago (CBOT) December 2013 Wheat Futures price and the 2013/14 APW Multigrade price delivered port.

During late August early September, there were some sound selling opportunities when Multigrade contracts delivered local silo were around $250/tonne. At this time, market analysts had suggested there was significant downside to wheat prices. Although this downside potential still exists, wheat prices seem to be relatively stable at present. It is important to remember though, that current prices are well above long term average.

Currently the CBOT December 2013 Futures price is A$255/tonne equivalent and the APW Multigrade price is $292/t delivered port, reflecting a positive basis of A$37/tonne.

This compares with a negative basis of $5/tonne this time last year.

The above change in basis is a result of reduced international prices due to increased world wheat supply and stocks, offset by a declining Australian crop and A$ exchange rate.